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Wednesday, November 20, 2013

Recent Actions - Boustead runs on Steroids

With the recent Dow and S&P hitting the high 16,000 and 1,800 respectively, it seems no stopping the market going higher and higher. This is despite all the tapering noise that we are hearing for months now.

On the local market, we don't seem to have a run-up well above the 3,200 mark on the STI. It seems that markets are lost for directions and there simply no company that can well lead the way for the STI.

One position I've made today is liquidating all my shares for Boustead. I've divested them away at $1.585 for 6 lots and S$1.65 for 1 lot. Overall, this has been a good profits made well over 50% since I've purchased them couple years ago. I think this is a good stock for the long term run by a well managed management but the risk has gone up by a lot with current price sitting at the $1.65 range.

The reason I've decided to sell Boustead is because I feel the recent run-up has priced in forward earnings and expectations which the markets expected to be very good. Multiple PE valuations based on forward earnings have also gone up beyond their historical valuations and it is easy to see the risk. Sure, Boustead has a good upstream catalyst in their Iskandar investment, potential industrial pipeline, etc. But should the market suddenly turn southwards or any news that will affect Boustead, we can easily see its price go all the way to the $1.30-$1.40 range, which is the range I will be comfortable to pick them up again.

I've also divested small lots of FCOT today at $1.265 to reduce my exposure in Reits and raise further cash holdings.

With all the selling so far, my cash position has increased and it is in the comfortable range to pick up any opportunities should the market turn southwards.

18 comments:

Seems like you're preparing for some correction in the market? Im about 50% invested now. Still got another 50% cash to take advantage if opportunities comes in a correction. But I got a feeling that the market will continue running up at least to the end of December. This is just my gut feeling. I may be wrong. Haha

Somehow i don't really like the idea or being almost 100% invested. Even though i think the market still has some upside, i may be wrong. Thus, i would always have a warchest really to deploy in all circumstances. Maybe if the market gets really really cheap after a crash will i invest almost 100%. :p

I was a risk taker before too. Until the European crisis strike me hard.

Hi SMOL,

Bears and bulls make money. You're right. Last year I made money being a bear when the market was good. That's the irony. Somehow being a bear makes more money since when the market falls, it drops really fast.

(1) A little bit of greed is okay; too much of it then one becomes a greedy pig; waiting to be slaughtered.

(2) Be fearful when others are greedy.

(3) let the next person whom you passed the baton to, to also enjoy the remaining sweet juice, if there are more of it. Spread the joy of winnings.

(4) As mentioned earlier, you can already re-use the proceeds for other investment opportunities. The stock market is like a big ocean, you will soon spot a fat juicy fish so do not let it wait too long for you.

Never again shall you letting this silly seller's remorse thingy be in your way for more successes.